House to vote on shutting down state liquor store system

A plan to privatize Pennsylvania's state-controlled liquor store system and liberalize beer sales laws is being scheduled for a vote early next week.

A spokesman for the House of Representatives' Republican floor leader said Friday the plan would shut down the existing 620-store system and sell or auction 1,600 new licenses for wine and liquor stores.

House Majority Leader Mike Turzai's plan would give retail beer distributors the right to buy a license. Others would be auctioned, and it would limit the number of stores one licensee could own.

It also would change beer sales laws to allow distributors, grocery stores and taverns to sell in wider varieties, from six-packs to cases of 24 bottles or cans.

The union representing 3,500 employees of Pennsylvania's state-owned liquor stores announced Tuesday that they ratified a new labor contract through mid-2015, igniting a debate over the workers' rights if ongoing efforts to privatize the liquor and wine trade are successful.

One union leader said the pact requires any private companies that take over all or any portion of liquor and wine sales to hire displaced state-store employees and to adhere to contract provisions covering salaries, health insurance and pension benefits.

The state must advise prospective operators that the contract is "binding in its entirety upon them for the duration of its term," said Wendell W. Young IV, president of Local 1776 of the United Food and Commercial Workers.

"This, I think, really makes any discussion of privatization moot for several years," Young, a vocal privatization foe, said in a telephone interview.

A spokesman for Gov. Tom Corbett, who supports closing the more than 600 state stores, argued that private businesses cannot be forced to honor a contract covering state employees.

"A collective bargaining agreement is not assignable," said Dan Egan of the governor's Office of Administration, noting that the contract language governing state-store closings dates back to the Casey administration. "We've always held that that provision is not enforceable," Egan said.

The four-year contract with two UFCW locals, which is retroactive to July 1, 2011, when the previous contract expired, provides pay raises totaling more than 6 percent.

They include a wage freeze in the first year, a 1 percent raise on July 1, back-to-back 0.5 percent increases in July 2013 and January 2014, and a 2 percent boost in July 2014, plus adjustments that add up to an average 2 percent increase over the life of the contract, Young said.